NFTs are being utilized for a variety of purposes, the most common is investing and exchanging digital artwork. This is made possible by services such as OpenSea etc, which allow users to purchase, trade, and swap their NFTs for digital currencies. Nevertheless, the applications of NFTs go far away even from this conjecture to include some innovative solutions and methods.
Soulbound Tokens (SBTs) appear to be one of the latest trends in the crypto arena. The new buzzword, which may eventually become a hotcake in the crypto business, has the potential to transform countless areas that consumers have been dependent on for a long. Building on these Soulbound Tokens, or SBTs, new apps, products, and experiences can be delivered.
In this blog, we will explore how Soulbound token development is going to change the crypto landscape in the future. We will also dig deep into various practical use-cases of the SBTs.
Understanding Soulbound Token
A Soulbound Token is the one that cannot be swapped once obtained. You can’t trade with these tokens if they’re already in your wallet. They are linked to you. When you obtain a Soulbound Token, you keep it in your Soul wallet for the rest of your life. The Soulbound token can only be burned by the originator. The accounts/wallets are referred to as “Souls”, and the tokens owned by the accounts are referred to as “Soulbound Tokens” (SBTs).
Recently, in a landmark article, Vitalik Buterin introduced Soulbound tokens. This paper’s summary describes how Web3 now focuses on transferrable and funded assets instead of encrypting social bonds of trustworthiness. This is regardless of the fact that many solutions in this market are based on long-term, non-transferable partnerships. Unsecured debt loans and brand development are two of these services.
That’s the reason researchers of this study proposed the concept of non-transferable tokens, sometimes known as “Soulbound” or SBT tokens. These are symbols of “Souls'” obligations, qualifications, and associations, which could be used to gain credibility and authenticity through trust networks.
Use cases of Soulbound Token
Souls and Art
Creators presenting their artwork as non-fungible holdings have helped the virtual currency sector build the NFT business. This enabled great and exciting features, such as licensing fees handled via smart contracts connected to a particular artwork.
Financing of the Soul Tokens
Financing has proven to be extremely beneficial in the crypto space over the previous decade. We saw a huge volume of initiatives release new capabilities and solutions for customers who wish to prevent utilizing centralized systems to raise sufficient funding as decentralized finance (DeFi) solutions have grown in popularity.
ERC-20 tokens have played an important role in financing. However, with Soulbound tokens, everything may get easier to execute. Unsecured debt financing is one of the biggest investment beliefs created directly on track record.
Conventional financial sector services depend on centralized rating algorithms to supply customers with unsecured debt facilities. However, SBTs have the potential to alter the crypto business in the coming years. Soulbound NFT development can provide a novel censorship-resistant substitute to centralized financial firms’ community rating systems.
SBTs can reflect educational qualifications, career experience, and lease agreements. It thus can become the best tactics to demonstrate the potential ability to repay.
Because Souls can recognize persons and exhibit their distinct qualities and achievements as they acquire SBTs, it is conceivable to develop new sorts of airdrops built on SBT algorithms. For instance, projects may be enabled to airdrop tokens to select Souls who meet minimum requirements specified by SBTs.
It is likely that SBTs provided to Souls via airdrops will convert into transferrable tokens subsequently. SBTs appear to have a wide range of capabilities and potential, including initiatives that aim to support the community through airdrops.
Airdrops have been shown to be among the most effective methods for enterprises to distribute tokens to the community. Airdrops may become more feasible courtesy of Soulbound tokens.
How can you get Soulbound Tokens back if you lose them?
The originator may be able to restore the tokens if the holder loses them. This has been made clear that if a Soulbound token is misplaced, it can be reclaimed via community restoration. This implies that the Soul is the “egalitarian vote” of the virtual community.
For this to happen, a customer chooses a community of custodians and provides them complete control of his soul wallet. Custodians could be persons, organizations, or other bodies. This supplements the overall purpose of Soulbound NFT development.
The Development of Soulbound Tokens
It is estimated that these tokens will be developed and available in the public sphere in the last quarter of the current year. However, since they are still at a nascent stage of development, their launch may also get delayed till the first quarter of the next year.
Soulbound tokens are expected to become more popular in the coming years. While NFTs are employed for authentication services and other critical issues, Sounbound token development provides a straightforward alternative that can help NFTs gain traction.
If you are planning for Soulbound token development, Antier Solutions can help. We deliver customized services to help you launch your token and take the lead.
Connect with our subject matter experts for Soulbound NFT development.